Money Money Money

After hearing some very sobering news about the current state of the fiscal policy of most americans, I thought I might share some of the ideas that my family has been using to conserve our cash flow with the prayer that it might be beneficial to some of you- the all of 2 people who read my blog.
I was listening to NPR and heard some interesting statistics: American savings was at -1% last year and is now at 5%. The beginning of the recession was precipitated by the sub-prime mortgage debacle. The current period of recession is "consumer driven". The average credit card debt carried by an american household is just over $8,000.00 and NO state is immune to that number.
Some of these statistics are old, and some are new. But the important thing is that they are there.
Here are some things my family does to ensure our financial viability through this tough time.
1. Every week for the start of the lesson portion of family home evening, we read one section from the pamphlet "One for the Money" distributed by the church, written by Elder Marvin J Ashton. We are able to review one section, week by week, and evaluate how we are doing as money managers, where our money is being spent and how often. This is a great little book and I highly recommend it. It also prompts discussion about how to appropriately involve our children in the family finances and gives us ideas about how to teach our kids good fiscal policy.
2. We run a "stress test" every few months to see how we are holding up to our budget. A stress test is essentially a worst-case scenario exercise involving your current budget, how long you can survive on what your savings is RIGHT NOW, and what you might be able to streamline. I was pleasantly surprised last night to find that our budget as it stands will give us financial security for 8 months- just like Suze Orman recommends. If you run a stress test and find that some things can be streamlined NOW, then do so and start saving even that little bit for later.
3. At the beginning of each 6 months, I do a re-budgeting. The first month of every 6, I will keep each and every receipt I can for ANY purchase made. At the end of the month, I compare how, where, and when I spent money, and on what- this gives me an updated idea of the family needs every 6 months and lets me adjust my budget where it needs it most.
4. The first of each month is "BILL PAY DAY". This means that I take about 1 hour and pay all bills by check or online and get them ALL DONE at once. Utility companies are glad to adjust your pay date earlier or later depending on when you want to make your "Pay Day"! Paying all of them at once, again, SHOWS you where and how much you spend for your home, gas, electricity, phone, internet etc... I also take BPD to transfer ALL the money we will need for the month (barring unforseen emergencies) into my checking account and THATS WHAT I CAN USE.
5. All discretionary spending is done on a CASH ONLY BASIS. That means when the cash runs out, so does my spending power.
6. ALL OTHER FUNDS ARE DEPOSITED DIRECTLY INTO SAVINGS!!! If you never put it into your checking account, then you are less tempted to spend it.
7. When you look to save, you will save all you can. When you look to spend, you will spend MORE than you can. We always look to save.
8. My family's motto this year (and I think from now on) is from President David O. MacKay:
"Fix it up, Wear it out, Make it do, or Do without."
I think this is the most basic idea involved in Provident Living. We have been counseled time and time and time and time again to "live within our means". I hope that maybe some of the things we do to keep our family solvent (unlike the banking system) may help you or give you an idea of what to change, streamline or just boost your self esteem about your money management. We've enjoyed prosperity because of this. I hope you do to!